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Digital Camera under 300$

My recommendation always has been, just about always will be Canon Powershot SD series. I've got an SD600 that's been flawless, my girlfriend has one, my mom has an SD200, and everyone who's bought one, loves them. They're small, portable, and take pretty darn good pictures for a point and shoot.
 
Back when most Digis maxed out at 3.2 mega pixels; I picked up an HP for 40 bucks at a pawnshop. I still use it, but I really want a digital SLR.

You may have to look for a while but check out your town's pawnshops. They always seem to be good for these sorts of consumer electronics.
 
I can't say enough good things about my Canon Powershot SD1000. Very user friendly, takes excellent pictures, and it even has a viewfinder. Oh yeah, the LCD is really crisp compared to other similar cameras I've seen.

Get a Canon Powershot.